Good Neighbors Campaign: Community Letter to Mayor Nutter

As you know, we are a city in crisis. For the past few years, our schools and essential services have suffered as a result of budget shortfalls.

We the undersigned believe that everyone needs to pay their fair share so that our city can resolve this crisis. Yet according to a recent PhillyPlan/Inquirer study, the nonprofits that own 10.8% of property in Philadelphia pay nothing in property taxes due to now-obsolete tax exemptions. Every year, tax exemptions cost our city $528 million in lost revenue.

That’s why we are calling on you today to make sure that large nonprofits pay their fair share, as required under Philadelphia tax law in light of the Pike County State Supreme Court decision.

This April, in its Pike County decision, the Pennsylvania Supreme Court ruled that all property-owning nonprofits must demonstrate that they qualify as charitable under the 5-prong HUP test in order to qualify for property tax exemption. Under the Philadelphia City Charter, that means that your administration is legally required to issue tax assessments to all property-holding nonprofits this December.

Many nonprofits will still qualify as charitable, and will simply need to take a few moments to file for property tax exemption under the new rules. We have no quarrel with property tax exemptions for houses of worship, or for important services like health clinics, emergency rooms, educational facilities, and other important properties used to serve the public good. But when nonprofits lease their property to for-profit corporations, let vacant land lie fallow, or run for-profit enterprises like parking garages and hotels, your administration not only should but is legally required to tax those properties at their most recently assessed value.

Mayor Nutter, we are calling on you not only to pledge to do what is right, but to pledge to do what is legally required of your office. We call on you to issue tax assessments to all nonprofits this December, regardless of past (now obsolete) exemptions.